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The Economic Front

Canada contributed to the Allied war effort in many ways. It financed much of the British Commonwealth Air Training Plan (BCATP) in addition to providing land for the development of hundreds of airstrips across the country. Through a mutual aid program, Canada lent Great Britain $3 billion dollars throughout the course of the war. Britain desperately needed this kind of support to pay workers and troops and to purchase foodstuffs, equipment, and supplies, all of which were necessary to stave off an all-out attack and conquest by Germany.

Equipping a modern army and supplying Britain and other allied countries with key resources and materials resulted in a complete transformation, by 1941, of Canada’s economy. The federal Ministry of Munitions and Supply had the authority to convert and expand peacetime production facilities into military munitions, equipment, and vehicle plants. The country, once crippled by high unemployment and other impacts of the Great Depression, now faced a labour shortage. Industrial and agricultural production grew at a staggering rate between 1939 and 1945.

Alberta ’s economy also benefited from these events, with the bulk of the impact being felt in the agricultural and non-renewable resource sectors. Alberta emerged as a key producer of wheat, cereal grains, meat and dairy products, coal, and oil. While most production facilities on the prairies were overlooked for military production contracts on account of their distance from key east coast shipping ports, they did benefit from increased demand for product.

Alberta’s capital city, Edmonton, benefited from a large influx of British Commonwealth Air Training Program-related personnel and American military and associated civilian personnel between 1942 and 1945. The Americans made the city their base of operations and supply hub for the development of three large, war-related projects: the construction of the Alaska Highway, the Northwest Staging Route, and the CANOL Pipeline.

One of the negative consequences of all of this new economic activity was inflation. To curb inflation, the federal Wartime Prices and Trade Board, in December 1941, froze prices and salaries. In addition, the Board instituted the rationing of food, materials, and products deemed vital to the war effort, thereby ensuring a sufficient flow of key supplies to Britain. To ease inflationary pressures, consumers were encouraged to spend less and use their newfound savings to purchase Victory Bonds. The Victory Loan campaign was critical to the success of Canada’s war effort, accounting for one-half of the funds needed to finance the nation’s military expenses during the war.

References

Boas, William S. Canada in World War II: Post-War Possibilities. Montreal: William Boas & Co., 1945.

Smith, J. M. Canadian Economic Growth and Development from 1939 to 1955. Ottawa: Royal Commission on Canada's Economic Prospects, 1957.


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